The largest student-run health-care conference in Boston on January 29th!
Venture capital. Cash cycles. Information Technology. Nanotechnology. Resveratrol. Gene therapy, stem cells, epigenetics. Autism.
No, this isn’t a recap of RC cases, topics, and recruiting. These are some of the terms that are being used at the HBS Healthcare Conference, now in its 8th year. With 650 participants, 300 from outside the HBS community, 71 schools represented, and many organizations participating as panelists, speakers, and attendees, there is the typical anxious and excited tension in the air that is common on campus. For those tracking stats or suffering from FOMO, that’s one HBS student as a conference attendee for every 5 or 6 current students.
$170 million. $350 billion. $2.57 trillion. These are numbers (Atlas Ventures’ assets under management, money spent annually in the U.S. on organ failure and related complications, and total healthcare spending in the U.S. in 2010, respectively) that should help you realize that this industry is not playing with pocket change. Big bucks are flying around, and with so many people controlling assets without solid business backgrounds, there are the expected inefficiencies costing everyone money as well as opportunists grabbing some for themselves (insert joke about big pharma or health insurance firms here). Projections currently point to the national spending as % of GDP to come close to 50%. Surely, that must be wrong! 50%!! To those of you not actually directly increasing GDP (cough…bankers and consultants), you had better be prepared to serve this market. Put another way, by the end of our (long and fulfilling) careers, it will actually require an active effort to avoid the industry.
The healthcare industry is politically important, financially well-funded, socially inclined (in general), and omnipresent in the lives of every person. As the RCs will soon experience ad nauseum, the economic, ethical, and legal tradeoffs (thank you LCA!) threaten to be a new “trilemma” (thank you BGIE!) that presents a continuous string of challenges for those involved in the system. Both the RC and EC curricula seem to stress healthcare companies and situations. RCs should look forward to the U.S. healthcare reform case in BGIE. TEM incorporated a healthy dose (get it?) of healthcare cases, and for good reason.
The conference itself was incredibly well organized. Kudos to the Healthcare Club, the conference co-chairs (Gil Addo and Andrew Lechleiter), and their supporting cast of operations, marketing, and strategy personnel. The list of panelists and speakers was diverse, distinguished, and relevant. I was very happy to find that this was not just a long day spent listening to a handful of HBS professors (no offense). Hearing the perspectives of those in the industry is particularly helpful for me because as much as we HBS students like to believe that we have the perfect high-level strategic insights to run a company, there are many tactical problems on the ground that need to be solved with the strategy that is in place and sufficient for the time being.
One of the speakers, Angela Braly, CEO of Wellpoint, a health insurance provider, had a particularly intriguing presentation. Well structured, clear, and expertly delivered, it was the payer’s perspective on healthcare spending, what has happened to get us to this point (17.3% of GDP!), and where we could be headed. It was a presentation that even McKinsey would be proud of. The two most compelling takeaways for me were the consumer orientation of the company, trying to effect better outcomes, but also the defensive undertones, well positioned, deflecting blame for rising health care costs away from insurers. (As a side note – I am interested to know if someone can present an argument refuting the need for constant net margins as top line revenue increases top drive share price appreciation in a business with negative net working capital and huge economies of scale. Seriously, help me out, I’m not that smart.)
One of the most salient points of the conference was during a panel discussion about improving quality and efficiency in healthcare delivery. Dr. Gregg Meyer put forth the notion that in order to get better outcomes and change patient behavior, providers need to focus on doing something WITH the patient rather than TO the patient. This almost sounds like a LEAD case. There are incentive concerns on top of everything else, so when individual actors are behaving in their own economic best interests, the incentive mechanisms need to be aligned toward the right ends. Fee-for-service, capitation, and pay-for-performance plans all have their drawbacks and misalignments, so the imposition of MBA skill sets on this industry really can have a significant impact.
The questions put forward during the Q&A parts of the session seemed to fall into four clear categories. First, look at how smart I am! Second, how can I get a job working for you? Third, this is a misplaced question and I should have listened to the last 45 minutes to realize that I should have gone to the other concurrent talk. Finally (and these are the true gems), there are truly insightful questions from well-informed individuals that can help move the thinking forward for several hundred people all at the same time. It has given me greater appreciation for being at HBS where people generally ask intelligent [read: concise, relevant, and topical] questions or are quickly put on the right track by peers [read: Skydeck].
I should temper my seemingly pessimistic and fatalistic view with some optimism. A conference such as this reinforces the notion that the issues with health care are many and substantial, but there is progress and there are many capable people working together in great numbers to resolve these issues. Countless people among payers, providers, patients, and suppliers are working in the environment because of the desire to lower the cost burden and improve the outcomes. With great credentials and benevolent intentions, I am convinced that the coming decade will show marked improvement, manifest as a slowing of the trend of increasing costs without compromising the rate of scientific discoveries.
Karen Sein, co-president of the Healthcare Club, was optimistic about the impact that the conference is having within the HBS community and on the business world: “We’re very pleased with this year’s conference. Already we have received a lot of good feedback from participants. The conference helps to foster the development of Harvard Business School’s reputation as a place that develops capable leaders for the healthcare industry.”
“How can I get into healthcare venture capital?”
Network, network, network. Suggestions from the VC panel also stressed the importance of having a unique perspective or knowledge just to start a conversation, getting operating experience, working in portfolio companies first, and having a core competency (ops, market research, etc.). One point that was made by one of the panelists was that aspiring VCs often don’t know what it is to be an associate or they don’t have a clear area of expertise which they can contribute beyond the capabilities of the existing team. What unique trait do you bring to their business?
“Are any of the companies that attended hiring?”
Absolutely! Your best bets include checking the conference registrants, their corporate career portals, and the people that came to the conference. Incidentally, many of them are HBS grads or affiliates. Many of these companies are too small to participate in or are growing too fast to keep up with the standard HBS recruiting cycle. Ironwood Pharmaceutical, for example, a Cambridge-based company and not quite a year since its IPO, spoke openly of having positions and trying to solicit interest from within the HBS community. To add a data point, a quick check of their website shows 28 full-time positions open, with a variety of them not specifically for scientists and conducive to MBA-type skills.
Additionally, the career fair at the end of the conference had 22 registered companies. Although a few were unable to make it to Boston due to weather issues, there was a good turnout and some interesting firms to speak with. A number of recent alumni were present to promote their companies and search for the next round of HBS talent.
Did you know that
– A vegan diet, relative to an omnivorous diet over the course of 30 years, will extend your life by 9.7 years?
– Reimbursement policies probably affect the allocation of R&D capital as much as the science?
– The expression “blow smoke up one’s @$$” may have originated from the 18th-century practice of applying a tobacco smoke enema to revive drowning victims (subsequently shown to not be efficacious)?
– Smokers are net economic contributors relative to non-smokers, largely due to higher insurance premiums and shorter life spans that draw much less from retirement plans such as social security and defined benefit plans?
– Healthcare costs cause a bankruptcy every 30 seconds in the U.S.?
– A pregnant woman can affect the expression of her child’s genes as well as those of her grandchildren based on her diet during pregnancy?
Dan Monahan is an EC student at HBS, focusing his job search on the health care sector, and specifically personalized or genomic medicine. Married to a physician, his dinner conversations usually end with a plate of spaghetti being thrown against a wall, followed by a quick reference to Michael Porter’s Value-Based Health Care Delivery to settle a bet.